Bill Start

An act to amend Section 1739.7 of the Civil Code, relating to collectibles, and declaring the urgency thereof, to take effect immediately.

[
Approved by
Governor
October 12, 2017.
Filed with
Secretary of State
October 12, 2017.
]

LEGISLATIVE COUNSEL'S DIGEST

AB 228, Gloria.
Collectibles: sale of autographed memorabilia.

Existing law regulates the sale or offer to sell by a dealer to a consumer of a collectible in or from this state, as specified. Existing law defines the term “collectible” to mean any autographed item, as specified, sold or offered for sale in or from this state by a dealer, to a consumer for $5 or more. Existing law defines the term “autographed” to mean bearing the actual signature of a personality signed by that individual’s own hand. Existing law defines a “dealer,” among other things, as a person who is principally in the business of selling or offering for sale collectibles in or from this state or a person who by his or her occupation holds himself or herself out as having knowledge or skill peculiar to collectibles. Existing law includes a person engaged in a cable television business for the sale of collectibles in the definition of dealer. Existing law excludes, among other
persons, the personality who signs the memorabilia from the definition of dealer. Existing law also excludes from the definition of dealer a provider or operator of an online marketplace, provided that the marketplace provider or operator is not principally in the business of selling, or offering for sale, collectibles, in or from the state, exclusively or nonexclusively, or does not hold itself out as having knowledge or skill peculiar to collectibles.

This bill would instead define “autographed collectible” to mean an autographed sports or entertainment media item, as specified, sold or offered for sale by a dealer to a consumer for $50 or more, bearing the signature of a particular
person
that increases the sale value of the item over that of a comparable item without the actual signature. The bill would exclude, among other items, works of fine art, signed books, furniture, and decorative objects, from the definition of an autographed collectible. The bill would amend the definition of a dealer to be, among other things, a person who is in the business of selling autographed collectibles and who sells 3 or more autographed collectibles in a period of 12 months. The bill would include a person engaged in any television business for the sale of autographed collectibles and an auctioneer or auction company in the definition of dealer. The bill would
delete the exclusion of a provider or operator of an online marketplace from the definition of dealer.

Existing law requires a dealer to provide a certificate of authenticity, as specified, for each collectible to, among other things, indicate to a buyer whether a collectible item was purchased from a 3rd party and if so, the name and address of the 3rd party.

This bill instead would require a dealer to provide an express warranty, as specified. The bill also
would require a dealer, for items obtained on and after January 1, 2018, separate from the express warranty, to maintain a record stating whether the autographed collectible was purchased by the dealer from a 3rd party and the name and address of the 3rd party. The bill would permit discovery of this information in a civil dispute, as specified. The bill would require the dealer to keep the 3rd-party information on file for 7 years.

Existing law requires a dealer displaying or offering for sale a collectible in this state to have at the location and in close proximity to the collectible merchandise a conspicuous sign that informs consumers of the written certificate of authenticity requirement, as specified. Existing law exempts auctioneers selling collectibles from this requirement. Existing law also requires a dealer engaged in a mail-order, telephone-order, or online business for the sale of collectibles in or from this state to, among other things, include in
each television or online advertisement a similar disclosure in an onscreen message, as specified.

This bill would require an auctioneer, auction company, and a vendor at a trade show to display specified signage regarding the express warranty requirements for autographed collectibles.

Existing law grants certain individuals the right to cancel or to rescind certain contracts within a specified number of business days. Existing law requires a retail seller that sells goods to the public in this state that has a policy as to any of those goods of not giving full refunds, or of not allowing equal exchanges, or any combination thereof, for at least 7 days following purchase of the goods, as specified, to conspicuously display that policy, as specified.

The bill would
grant a consumer the right to cancel the contract for the purchase of an autographed collectible represented by a dealer as authentic until at least midnight of the 3rd day after the day on which the consumer purchased the autographed collectible, except when the autographed collectible is purchased at a public auction or trade show, or as part of a trade or barter, as specified. The bill would specify procedures and conditions of the cancellation. The bill would require the 3-day right of return, except as specified, to be included in the sign and the onscreen message a dealer is required to display.

Existing law prohibits a dealer from displaying
or offering for sale a collectible in this state at any trade show or similar event primarily featuring sales of collectibles or other memorabilia that offers onsite admission ticket sales, except as provided. Existing law requires a promoter who arranges or organizes a trade show featuring collectibles and autograph signings to provide a specified notification to any dealer who agrees to purchase or rent space in the trade show.

This bill would repeal those provisions.

Existing law provides that a consumer who is injured by a failure of the dealer to provide a certificate of authenticity is entitled to recover from that dealer, among other things, 10 times his or her actual damages. Existing law also authorizes the court to award additional damages based on the egregiousness of the dealer’s conduct.

This bill instead would provide for specified civil penalties in a civil action
against the dealer for failure to comply with the provisions regarding express warranties. The bill would provide for separate specified civil penalties for providing a false warranty, providing a false warranty as the result of gross negligence, and knowingly providing a false warranty, as well as attorney’s fees and other costs to be paid to the consumer. The bill would authorize the court to award punitive damages based on the egregiousness of the dealer’s conduct.

This bill would declare that it is to take effect immediately as an urgency statute.

Digest Key

Vote:
2/3
Appropriation:
NO
Fiscal Committee:
NO
Local Program:
NO

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

Section 1739.7 of the Civil Code is amended to read:

1739.7.

(a) As used in this section:

(1) “Autographed collectible” means an item bearing the signature of a particular person that is sold or offered for sale for fifty dollars ($50) or more, excluding sales tax and shipping fees, when the
dealer offers the signed item at a higher price than the dealer would charge for a comparable item without the signature.

(2) For purposes of this section, an autographed collectible shall be limited to the following items:

(3) For purposes of this
section, and notwithstanding paragraph (2), an autographed collectible does not include the following items:

(A) Works of fine art, as defined by paragraph (1) of subdivision (d) of Section 982 that are originals or numbered multiples, and signed by the artist or maker.

(B) Furniture and decorative objects, including works of pottery, jewelry, and design that are signed by the artist or maker.

(C) Signed books, manuscripts, and correspondence, as well as ephemera not related to sports or entertainment media.

(D) Signed numismatic items or bullion.

(4) “Consumer” means any natural
person who purchases an autographed collectible from a dealer for personal, family, or household purposes. “Consumer” also includes a prospective purchaser meeting these criteria.

(5) (A) “Dealer” means a person who is in the business of selling or offering for sale autographed collectibles exclusively or nonexclusively, and sells three or more autographed collectibles in a period of 12 months. “Dealer” includes an auctioneer or auction company that sells autographed collectibles at a public
auction. “Dealer” includes a person engaged in a mail-order, telephone-order, online, or television business for the sale of autographed collectibles.

(B) “Dealer” does not include any of the following:

(i) A pawnbroker licensed pursuant to Chapter 3 (commencing with Section 21300) of Division 8 of the Financial Code, if the autographed collectible was acquired through a foreclosure on a collateral loan, provided that the pawnbroker does not hold himself or herself out as having knowledge or skill peculiar to autographed collectibles.

(ii) The person who autographed the collectible.

(6) “Limited edition” means any autographed collectible that meets all of the following requirements:

(A) A company has produced a specific quantity of an autographed collectible and placed it on the open market.

(B) The producer of the autographed collectible has posted a notice, at its primary place of business, that it will provide any consumer, upon request, with a copy of a notice that states the exact number of an autographed collectible produced in that series of limited editions.

(C) The producer makes available, upon request of a consumer, evidence that the electronic encoding, films, molds, or plates used to create the autographed collectible have been destroyed after the specified number of autographed collectibles have been produced.

(D) The sequence number of the autographed collectible and the number of the total quantity produced in the limited edition are printed on the autographed collectible.

(8) “Representation” means any oral or written representation, including, but not limited to, a representation in an advertisement, brochure, catalog, flyer, invoice, sign, radio or television broadcast, online communication, Internet Web page, email, or other commercial or promotional material.

(9) “Auctioneer” means an auctioneer as defined in
subdivision (d) of Section 1812.601, or a representative or agent of an auctioneer.

(10) “Auction company” means an auction company as defined in subdivision (c) of Section 1812.601, or a representative or agent of an auction company.

(b) A dealer who, in selling or offering to sell to a consumer an autographed collectible, makes a representation to a consumer that the signature on the autographed collectible is
the
authentic signature of a particular person in that person’s own hand, shall furnish an express warranty to the consumer at the time of sale.
The dealer shall retain a copy of the express warranty for not less than seven years. The express warranty, which may be included in the bill of sale or invoice, shall meet all of the following criteria:

(1) Is written in at least 10-point type.

(2) Is signed by the dealer or his or her authorized agent, and contains the dealer’s true legal name, business street address, and the last four digits of the dealer’s seller’s permit account number from the California Department of Tax and Fee Administration, if applicable.

(3) Specifies the date of sale and the purchase price.

(4) Describes the autographed collectible and specifies the name of the person who autographed it.

(5) Expressly warrants the autographed collectible as authentic, and that the warranty is conclusively presumed to be part of the bargain. The warranty shall not be negated or limited by reason of the lack of words such as “warranty” or “guarantee” or because the dealer does not have a specific intent or authorization to make the warranty or because any statement relevant to the autographed collectible is or purports to be, or is capable of being, merely the dealer’s opinion.

(6) If the autographed collectible is offered as one of a limited edition, specifies (A) how the autographed collectible and edition are numbered and (B) the size of the edition and the size of any prior or anticipated future edition, if
known by the dealer. If the size of the edition and the size of any prior or anticipated future edition is not known, the warranty shall contain an explicit statement to that effect.

(7) Indicates whether the dealer is surety bonded or is otherwise insured to protect the consumer against errors and omissions of the dealer and, if bonded or insured, provides proof thereof.

(8) Indicates if the autographed collectible was autographed in the presence of the dealer, and any proof thereof. Specify the date and location of, and the name of a witness to, the autograph signing, if known, and applicable.

(9) Identifies all information upon which the dealer relied
when making the representation that the autographed collectible is authentic.

(10) Indicates an identifying serial number that corresponds to an identifying number printed on the autographed collectible item, if any.

(11) Indicates whether the item was obtained or purchased from a third party.

(c) The dealer shall retain, after January 1, 2018, a record of the name and address of the third party, as described in paragraph (11) of subdivision (b). This third-party information may be discoverable during a civil dispute. However, nothing in this subdivision prohibits a party from objecting to a
discovery request on the grounds of a right to privacy. This third-party information shall be kept on file for seven years.

(d) (1) In addition to any other right or remedy provided under existing law, including, but not limited to, any rights and remedies provided under contract law, a consumer shall have the right to cancel the contract for the purchase of an autographed collectible represented by a dealer as authentic until midnight of the third day after the day on which the consumer purchased the autographed collectible.
Notice of the cancellation may be provided in person or in a written or electronic form, and is deemed effective once communicated or sent. The autographed collectible shall be returned to the dealer within 30 days of the sale in the same condition in which it was sold, the cost of which shall be borne by the consumer. The price paid by the consumer shall be refunded within 10 days of receipt of the returned autographed collectible. Nothing in this section prevents the parties from agreeing to cancel a contract after midnight of the third day after the day on which the consumer purchases the autographed collectible.

(2) This subdivision does not apply to the following:

(A) Autographed collectibles sold by an auctioneer or auction company at auction.

(B) Autographed collectibles purchased by barter or trade of other items.

(C) Autographed collectibles sold at a trade show.

(D) Autographed collectibles sold by one dealer to another dealer.

(e) (1) No dealer shall display or offer for sale an autographed collectible unless, at the location where the autographed collectible is offered for sale and in close proximity to the autographed collectible merchandise, there is a conspicuous sign that reads as follows:“SALE OF AUTOGRAPHED COLLECTIBLES: AS REQUIRED BY LAW, A DEALER WHO SELLS TO A CONSUMER ANY COLLECTIBLE DESCRIBED AS BEING AUTOGRAPHED MUST PROVIDE A WRITTEN EXPRESS WARRANTY AT THE TIME OF SALE AND A THREE-DAY RIGHT OF RETURN. THIS DEALER MAY BE SURETY BONDED OR OTHERWISE INSURED TO ENSURE THE AUTHENTICITY OF ANY AUTOGRAPHED COLLECTIBLE SOLD BY THIS DEALER.”

(2) This subdivision does not apply to an autographed collectible sold by an auctioneer or auction company at
auction or an autographed collectible sold at a trade show.

(f) No dealer selling at a trade show, nor an auctioneer or auction company shall display or offer for sale an autographed collectible unless, at the location where the autographed collectible is offered for sale and in close proximity to the autographed collectible merchandise, there is a conspicuous sign that reads as follows:“SALE OF AUTOGRAPHED COLLECTIBLES: AS REQUIRED BY LAW, A DEALER WHO SELLS TO A CONSUMER ANY COLLECTIBLE DESCRIBED AS
BEING AUTOGRAPHED MUST PROVIDE A WRITTEN EXPRESS WARRANTY AT THE TIME OF SALE. THIS DEALER MAY BE SURETY BONDED OR OTHERWISE INSURED TO ENSURE THE AUTHENTICITY OF ANY AUTOGRAPHED COLLECTIBLE SOLD BY THIS DEALER.”

(g) Any dealer engaged in a mail-order, telephone-order, or online business for the sale of autographed collectibles:

(1) Shall include the disclosure specified in subdivision (e), in type of conspicuous size, in any written advertisement relating to an autographed collectible.

(2) Shall include in each television or online advertisement relating to an autographed collectible the following written onscreen message, which shall be prominently displayed, easily readable, and clearly visible for no less than five seconds, and which shall be repeated for five seconds once during each four-minute segment of
the advertisement following the initial four minutes:“A written express warranty is provided with each autographed collectible, as required by law. This dealer may be surety bonded or otherwise insured to ensure the authenticity of any autographed collectible sold by this dealer.”

(3) Shall include as part of the oral message of each radio advertisement for an autographed collectible the disclosure specified in subdivision (e).

(h) In a civil action brought by a consumer against a dealer, the following shall apply:

(1) A dealer who fails to provide an express warranty, or provides an express warranty that does not comply with all of the requirements of subdivision (b), shall be subject to a civil penalty of up to one thousand dollars ($1,000), payable to the consumer.

(2) A dealer who provides a false express warranty that injures the consumer shall be subject to a civil penalty of up to one thousand dollars ($1,000) payable to the
consumer.

(3) A dealer who provides a false
express warranty
and whose act or omission amounts to gross negligence that injures the consumer, shall be subject to a civil penalty of three thousand dollars ($3,000), or an amount equal to three times actual damages, whichever is greater, payable to the consumer.

(4) A dealer who knowingly provides a false express warranty, or knowingly fails to provide an express warranty required by this section, and whose act or omission results in an injury to a consumer shall be subject to a civil penalty of five thousand dollars ($5,000),
or an amount equal to five times actual damages, whichever is greater, payable to the consumer.

(5) A consumer may recover court costs, reasonable attorney’s fees, interest, and expert witness fees, if applicable, pursuant to an action described in paragraphs (2) to (4), inclusive.

(6) The remedies specified in this section are in addition to, and not in lieu of, any other remedy that may be provided by law. The court, in its discretion, may award punitive damages based on the egregiousness of the dealer’s conduct.

(i) A dealer may be surety bonded or otherwise insured for purposes of indemnification against errors and omissions arising from the authentication, sale, or resale of autographed collectibles.

(j) It is the intent of the Legislature that neither the amendment to this section by Assembly Bill 1570 of the 2015–2016 Regular Session, adding an exclusion of
a provider or operator of an online marketplace to the definition of a dealer, nor the amendment to this section by Assembly Bill 228 of the 2017–2018 Regular Session, removing that exclusion from the definition of a dealer, be construed to affect the decision of the Court of Appeal in Gentry v. eBay, Inc. (2002) 99 Cal.App.4th 816.

SEC. 2.

This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:

In order to alleviate some of the burdens on, and to protect the privacy of, bookstore owners, collectors, comic book retailers, consignors, art galleries, and antique dealers as soon as possible, it is necessary that this act take effect immediately.